Future of cities

The UK’s largest cities and towns are where we come together to work, live and play. The pandemic has reminded us that, with the benefits that come from city life, there also come risks. But the lessons from the 6,000-year history of the city are clear: they survive, adapting to and overcoming the challenges of disease, conflict and economic change.

How has Covid-19 impacted urban life?

Our research has shown the extent to which the pandemic has impacted people’s day-to-day lives, demonstrating that those living in cities and large towns have been hit the hardest by Covid-19.

The beginning of the pandemic back in March 2020 and subsequent introduction of national lockdowns saw a dramatic fall in mobility and public transport use in UK cities as millions of office workers quickly shifted to working from home.

Since then, many city centres have struggled; high street footfall plummeted and sales in the retail and hospitality industries fell, which put millions of local service jobs at risk.

That said, while it is too early to predict the long-term effect that the pandemic will have on urban places, we consider the recession brought on by Covid-19 to be very different to previous ones and so we should expect the UK economy and many of its cities to experience a sharp bounce back.

Now, with the economy gradually starting to reopen and the Government’s plan to ease lockdown restrictions in full swing, it’s likely that we’ll see changes in UK cities over the coming months.

What effect has working from home had on cities?

The proportion of people able to work from home is often overstated. Our estimates suggest that people able to work from home are a minority in every single city and large town in the UK. London, Reading and Edinburgh have the highest shares of workers able to work from home – more than four in ten. Meanwhile, in Barnsley, Burnley and Stoke just two in ten people can work from home.

However, it is likely that the pre-lockdown working practices will change, with many people continuing to work from home for at least some of the week. However, this will not be a cost-free decision; many city centre shops and restaurants depend on custom from office workers and are likely to struggle if their weekday sales shrink.

While many have adapted smoothly to working from home, the benefits of face-to-face interaction are hard to replicate and working remotely means that we miss out on the spontaneous flow of ideas and the sense of camaraderie that being in an office creates. We will continue to need spaces to come together, collaborate and build relationships. Offices and co-working spaces are natural places to do this and city centres remain the most convenient places to locate them.

What does the future hold for UK cities?

Covid-19 has undoubtedly shaken urban places to their core, but we should be cautious about rushing to the conclusion that the pandemic signals the death of the city.

Cities have always been centres of disease as well as prosperity. Density has its downsides as well as upsides and yet historically cities have survived and thrived, continuing to function as places where people gather to do trade, to learn and to have fun.

The more prosperous a place becomes; the more people head there to make their fortunes. This is even truer in the UK today where more high-skilled jobs are based in cities and large towns in the Greater South East than in the rest of the country.

Young people are likely to continue to head to cities to develop their careers and have fun. The number of twenty-somethings in cities’ centres tripled in recent years. Today, young people comprise half of the city centre population. This is unlikely to change in the near future.

Cities will lead our economic recovery

While every part of the UK has been affected by Covid-19, UK cities and large towns have been hit the hardest, becoming unemployment hotspots. For this reason, they will play a particularly important role in creating jobs as we emerge from the pandemic.

Our research with HSBC UK examined growth patterns within the UK’s seven-year jobs miracle to inform how new jobs can be created as the Government looks to build back better and level up the country. This research identified that if patterns of the past persist, cities and large towns will be our main job creators post-Covid.

What should cities do as the nation recovers from Covid-19?

There are several things that national and local government can do to support their areas’ economic and social recovery from the Coronavirus pandemic.

  • Work with business groups to encourage workers back where appropriate
  • Make public transport safe and clean, launching a public information campaign encourage people to use public transport again once it is safe to do so
  • Establish a £5 billion City Centre Productivity Fund to make their city centres more attractive places to do business
  • Implement policy that supports job creation, specifically to help high street businesses and the hospitality sector find their feet again
  • In expensive cities build affordable housing close to jobs, cycle routes and public transport. This will reduce the need for low and middle-income people to flat-share
  • Introduce car-free zones, expand active travel and reprioritise roads and parking space for other uses – bars, restaurants and shops
  • Invest in parks and public outside space where people without gardens can socialise safely
  • Provide city centre workspaces for high-skilled workers that suit more flexible ways of working

More on the future of cities

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Southampton city centre

Valentine Quinio and Paul Swinney

This report looks at the economic performance of Southampton city centre in recent years, investigates the causes of it, and sets out what this means for the future direction of policy.

Report 1 Sep 2021